DXC Technology is the spin-off of Hewlett Packard Enterprise's enterprise services business referred to as Everett SpinCo and the immediate merger between said spin-off and Computer Sciences. The company is a leading provider of technology consulting, outsourcing and support services for infrastructure, applications and business process domains, including strategic enterprise service offerings of cloud, security, analytics, and data management.
DXC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for DXC, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that DXC Technology Co ranked in the 88th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 1848.5% on a DCF basis. As for the metrics that stood out in our discounted cash flow analysis of DXC Technology Co, consider:
The company's debt burden, as measured by earnings divided by interest payments, is -2.55; that's higher than merely 13.91% of US stocks in the Technology sector that have positive free cash flow.
22% of the company's capital comes from equity, which is greater than merely 13.75% of stocks in our cash flow based forecasting set.
DXC Technology Co's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than merely 0% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as DXC, try BIDU, TWTR, AVT, CLS, and DELL.